Audit of Oregon Employment Department Finds Plenty of Problems

After previous bad audits, the agency struggled to deal with a pandemic-caused spike in unemployment.

On July 27, Secretary of State Shemia Fagan released a blistering audit of the Oregon Employment Department.

Auditors examined the agency’s much-criticized performance during the initial stage of the pandemic, when unemployment soared from record lows of 3.4% to 13.3% in less than two months.

Previous audits in 2012 and 2015 had identified serious problems at the agency, notably a failure to use $85 million in federal money appropriated in 2009 to modernize OED’s ancient computer system. As claims soared 600% from 2019 to 2020, countless Oregonians received benefits late. When the agency did pay claims during the pandemic, auditors found, it paid them more slowly to people of color and those with lower incomes. (One bright spot: The agency deserves a gold star, the audit found, for paying out a vastly lower percentage of bogus claims than neighboring states and the national average.)

The agency largely agreed with auditors’ findings. “The goal of a safety net is for it to be there when you need it,” Fagan said. “This audit helps explain why Oregon’s unemployment insurance program failed when it was needed most.”